Thursday, December 04, 2008

Remember when You Use to Shop at...

We have those stores we remember shopping at in times past. When I was a kid I use to visit Santa at the Federal's Store in the Detroit, Michigan area. One year these stores started to spontaneously combust and they had to close them all. Later it was discovered that the owner of the store was behind these fires in an insurance fraud scheme. I also remember Cunninghams Drug Store, Woolworth's, and Kresge's. I loved spending my birthdays at Farrells Ice Cream Parlor with its old fashion charm (there are one or two of these left in California, but it use to be nationwide). Each of these stores were victims of economic hard times, but I still have fond memories of them.

Well, we are about to add to our list of stores and businesses that we will say, "remember when you use to go to...?"

  • Mervyns. This poor department store always seems to struggle in differentiating itself from others.

  • Steve & Barry's. This store had a fantastic marketing concept of providing college attire at a really low price. It appears the prices may have been too low.

  • Linens and Things. This store seemed to reach its pinnacle in the 1980s and has been in decline ever since.

  • Sharper Image. A cultural icon of the 1980s, this cutting edge store was found in movies. If you saw a news story about the "next big thing," you would likely find it first at Sharper Image.

  • Tweeter, Circuit City and CompUSA. Yes, even electronics and IT stores are vulnerable in this economy.

  • Whitehall Jewelers. Not all that glitters is profitable.

I don't believe the list will end here. This economy is extremely soft and it appears that only the major volume businesses might survive (this is a little over dramatic, but I am sure you get my point).

Stories such as these are a little scary. They are very scary if you actually work for one of these businesses. But businesses failing such as this are part of the natural business process and as they fall, they will be replaced with smarter and more efficient companies. Businesses fail because they did not respond to the demands of the market. It is, as Adam Smith described in his Wealth of Nations, the "invisible hand" that fuels economic progress. Some times it is painful, but it is also always effective, as long as government doesn't intervene.

So will a future article I write be "remember when you use to drive a...?" We will have to wait and see.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

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